Business and Organizations in UK: Legal Business Structure of Companies

This report discusses the different types of businesses and their advantages and disadvantages in the UK. It also explains the legal business structures of companies including sole trader, general partnership, limited liability partnership, and limited liability company. The report recommends IOM Solutions to choose a limited liability company to expand its business.

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Table of Contents
INTRODUCTION ..........................................................................................................................3
Main Body.......................................................................................................................................3
Business and Organizations in UK..................................................................................................3
The legal business structure of UK companies................................................................................5
Sole Trader:.................................................................................................................................5
General Partnership:....................................................................................................................5
limited liability partnership:........................................................................................................6
Limited Liability Company:........................................................................................................6
References........................................................................................................................................8

INTRODUCTION
The business organization is been explained as an act in which there is exchange of
services and goods in lieu of consideration. The business is actually done for earning more profit
from the business enterprise by selling goods and services which is being manufactured through
the enterprise. There are many laws which controls and directs functions of the business. These
are known as business law. The corporate law includes law of employment, protection law,
health and safety laws, etc. which is applicable on every concern business which takes place in
the country. Furthermore, the organisation of business is to be registered as law of nation. But
this have many type of business which needs not to registered as like sole (Giliker, 2021). The
report explains different kind of businesses. This also outline for its disadvantages and
advantages. This will also be recommended that IOM Solution chooses its best fitted type of
business in the last of report after all businesses were discussed.
Main Body
Organisation and Business in United Kingdom
In UK, the business with their management is regulated as per the Companies Act of
2006. The act contains provisions for formation of company along with their procedure. The
functions of business organisation with the assistance of workers. So, the employees and
employer conduct must be ethical as smooth functions of the enterprise. The act is written in the
policy of the organisation. Each worker and employer is bound for following all policies of the
company. The law also mentions that no employer can do any unfair dismissal of the worker
who is working in that company. The enterprise have many features which are perpetual
succession. This means that an enterprise continues to exist even after death or dismissal of any
member of the board or shareholder. The enterprise enjoys status of separate legal
entity(Formosa, 2018). The company can be sued and can sue anyone.
The behaviour of unprofessional worker and lack of business responsibilities in carry out
the operations gives emergence to different liability in an enterprise. One of the liability in the
case is Vicarious liability which arises in the business concern which is being operated on a
larger scale. The liability start when an employee behaves or acts deceitfully or commit any act
which is unlawful even when being an part of administration as its workers, then liability arises
on an employer as this held responsible and liable for actions of their workers and thus this act

within time in order to face any problem by the worker of the company(Erdos, 2022). In
addition to this, the business will suffer many problem in reference to negligent behaviour of any
associate or any employee at time of carrying out their obligations and roles. The director is an
person who gives the place for organisational head through which they have various roles and
duties which is being given to post which wants to perform with caution and honesty in order to
ensure that there is business carried out on this part. Hence, duties were not operated well
through the director then legal profession will rise on the management because of non
consummation of the legal obligations through the director of a company.
The director is awaited for performing well with an authority through taking the
knowledge in which proper decision is being taken on their part in behalf of an institution. The
management have an duty for ensuring that no fights which arises within the organisation in the
worker, if this arise then director will resolve them through promoting harmony within the
individuals. Furthermore, the unprofessional behaviour through the manager makes it liable for
breach of duty. Therefore, this type of behaviour through the manager makes this liable for
breaching the duty(Begum, 2020). The other director holds these director liable for misleading
behaviour from the workers. This is because it expects that the institutions do not suffer only
because of the mistakes done by their head. The directors were asked to provide remedy to the
enterprise through giving compensate of damages. Furthermore, the contract have to be
completed if some serious breach of duty happens. This can also change the director at time of
holding him with other practices or criminal offence for illegal practices done by him(Hardman,
and Rowell, 2021). The institution's property possession along with the manager can too taken
through them afterwards completing an contract.
The Partnership Act of 1890 regulate statement of partnership through giving provisions
which mention about how a establishment will be framed and how this will be expiration and
operated the partnership and this can happen due to the malpractices done through management
of company. The effectual direction of the enterprise can be occur with the assistance of
Memorandum of Association and Articles of Association. The MOA is legal idea which assists
in management of an arrangement for the enterprise at time of their incorporation but this only
enforced at time it get signed through the guarantors and shareholders(Akhtar, 2020). When
comparing this, the AOA is a written evidence type is defined the concept and regulations of the

institution which should be followed through them by employed in an institution. This required
directors consent and owners before this is enforced in the company.
Legal business structure of companies in United Kingdom
The sole trader is as well known as the sole proprietorship is a enterprise structure of
IOM solution which is an enterprise of Sam. He is been employed in this for last eight years and
in recently two years have grown-up his concern for business organization. Furthermore, the
Sole trader offers profit to Sam through earning of enterprise when this comes in his hand. There
are many legal structure of business which are being discussed below as follows-
Sole Trader:
The corporate structure for self-employment run by the sole person in their capacity. The
business organization provides an asset to the business that is cost-effective. Therefore, it is very
easy to use, open and run. This is a very favourite form of organization among young
businessperson who have started and developed their business organization on a very tiny scale.
They do this because of the accessibility of low finance and capital with them. It is particularly
preferable by an individual who wants to act as an proprietor by opening their own concern in
the form of small start-ups. In addition, the sole individual is the wage earner of all net income
and earnings bring forth in the business organization(Marsden, 2020). The determination is
made one-by-one, with no problem of one person’s involvement. The possession control render
with this type attracts the new businessmen. But getting private and family time out of the
company is often very ambitious. Income and corporation tax must be paid by the holder and he
should keep his personal data in view of the General Data Protection Regulation
General Partnership:
This kind of company consists of two or more than two single people who act as general partners
along the articles of association. Furthermore, these partners conduct the business organization
by jointly performing all the function and duties participating in the business organization.
Shareholders shall share profits and losses in a punctual and equitable manner under the
leadership of the business organization. The memorandum of association states that the
shareholders would share the costs of incorporation, the tax risks and debts, and the benefits

derived from the company(Adamou, Kyriakidou, and Connolly, 2021). In addition, as a result
of the agreement, they become collectively involved in the company’s activities and must share
joint liability in terms of risk management and accountability for any actions taken by them in
the organization. In doing so, they are dealing with unlimited personal obligation. However, this
is more dependable than a sole proprietorship due to simple investments in enterprise operations.
In addition, due to the contrary skills and appearance of partners, they have original decision-
making, which assist to amend the productiveness of the business enterprise. But the partners get
into trouble when they are admonished to make a joint commitment because of the other
partner’s misconduct. This is governed by the Companies Act, which regulates the establishment
and dissolving of commercial operations in the event of the death or insolvency of a shareholder
limited liability partnership:
This partnership turned a low number of liabilities compared to a generic business
operation. The situation is various with regard to the establishment of the facultative if there is a
limit to the sum of money that the shareholders may spend on the business. In addition, the
company is founded by two or more partners who are personally qualified to carry out all actions
in the company. But it has no collective or common obligation(Ries, and, et. Al., 2020).
However, this requires a enrolled office, which should be in conformity with the administrative
order. The Limited Partnership Act 1907 regulates an LLP by protective the interests of the
partners as well. It has drawn up a written statement that supports the effectual working of the
company.
Limited Liability Company:
It is also respect as a private limited institution governed by the Companies Act 2006
which details limited liabilities. It lays down commissariat on how a establishment is defined and
function, what is needful to form a partnership and how it can be dissolved. It has also created
legal optionals regarding the rights and duties of the directors and employees of the
establishment who must comply with the incorporation of the establishment. A director is usually
the head of the establishment who directs the direction of the establishment(Scott-Patel, 2019).
The institution belongs to the shareholders. It has a strong business firm identity. Proprietor
enjoy a minimal individual obligation.

Recommendation to IOM Solutions:
As a company grows and evolve, it needs to expand in time to take benefit of the
increasing possibility in the marketplace. This also assist the company adapt to the dynamical
condition. Therefore, Sam must select a limited liability company to expand his IOM Solutions
business. This legal form offers a number of advantages. It assist to share management obligation
with various people. It also aid keep higher earnings. It offers ratio in tax preparation. Due to its
reliability, more investors are attracted to this type, which assist in capital placement. This also
provides minimal personal liabilities that Sam can truly beneficial.
CONCLUSION
From this report this is being concluded that proper social control of the business
organization is necessary for it to efficaciously achieve its goals. Law of business regulates the
operation and management of a company. Business concern are run with the goal of generating
responsibilities and profit over the longer term. They differ in kind and size, and the owner
chooses their type accordant to his will. Sam is advised to go with a limited liability company to
expand his business organization. It can assist him to manage his private and professional life
with simplicity while making large investments that assist him earn net.

References
Books and Journals
Adamou, M., Kyriakidou, N. and Connolly, J., 2021. Evolution of public-private partnership: the
UK perspective through a case study approach. International Journal of Organizational
Analysis.
Akhtar, Z., 2020. Low Skilled Jobs, Free Movement Migration and Employment in the
UK. Labor Law Journal, 71(3), pp.144-153.
Begum, A., 2020. Corruption in business: A critical appraisal of the Australian regulatory regime
in the light of the UK Bribery Act 2010. Journal of Financial Crime, 27(3), pp.735-754.
Erdos, D., 2022. The UK and the EU personal data framework after Brexit: A new trade and
cooperation partnership grounded in Council of Europe Convention 108+?. Computer
Law & Security Review, 44, p.105639.
Formosa, A.M., 2018. From a sole trader to a company: a legal and financial analysis (Master's
thesis, University of Malta).
Giliker, P., 2021. Legislating on Contracts for the Supply of Digital Content and Services: An
EU/UK/Irish Divide?. Journal of Business Law, 2021(2), pp.143-162.
Hardman, J. and Rowell, N., 2021. The UK's director daisy chain: Empirical evidence of the
interconnectivity of directors of UK publicly traded companies. European Business Law
Review.
Marsden, E., 2020. “Music for your breakfast” relational work in a sole trader’s intercultural
business emails. Politeness in Professional Contexts, 311, p.225.
Ries, C., and, et. al., 2020. The END of the Beginning: Assessing the potential economic
implications of prolonged UK-EU trade policy uncertainty.
Scott-Patel, K., 2019. UK Employment Law-A Good Plan for Workers?. Int'l. In-House Counsel
J., 12, p.1.